Opening Balances | Multi-Currency double accounting

Opening balances represent the account balances at the beginning of the year or accounting period.

When you use Banana Accounting for the first time, you must manually enter the opening balances to create the opening balance sheet.

In Multi-currency accounting, before entering the opening balances, it is important to make some essential settings in the Exchange rates table and the Accounts table.

Set the opening exchange rates

In the Exchange rates table, set the foreign currencies used in the accounting and the corresponding opening exchange rate against the base currency.

The opening exchange rate is entered manually when you start using Banana Accounting. In subsequent years, when you create the new year using Actions > Create new year, it is automatically updated based on the closing exchange rate of the previous year's file.

For opening exchange rates, also consider the following:

• the opening exchange rate must be entered on the exchange rate row without a date
• it should not be changed, except in the event of errors or special situations
• the opening exchange rates must correspond to the closing exchange rates of the previous year.

For more information, see Opening balance difference.

Prepare the Accounts table

Before entering the opening balances, make sure that the chart of accounts, in the Profit and Loss Statement, includes the account used to Record exchange rate differences.

The account must also be specified in File > File and accounting properties (Basic data) > Foreign currency.

In Multi-currency accounting, opening balances must be entered in the Accounts table, Base view, Opening currency column, both for accounts in the base currency and for accounts in foreign currencies.

The Opening column, expressed in the base currency, is protected. Banana Accounting automatically calculates the equivalent value in the base currency using the opening exchange rate entered in the Exchange rates table.

Enter the opening balances

After setting the opening exchange rates and checking the chart of accounts, you can enter the opening balances.

1. Go to the Accounts table, Base view, Opening currency column
2. Manually enter the opening balances of the Asset and Liability accounts
3. Enter the balances of Assets as positive amounts
4. Enter the balances of Liabilities with a minus sign (-) before the amount
5. Check that the total Assets correspond to the total Liabilities and that the accounting is balanced.

Banana Accounting automatically calculates, in the Opening column, the equivalent value in the base currency of the balances entered in the Opening currency column.

If opening balance differences are reported, check the amounts entered and the opening exchange rates. For more information, see Differences in the opening balances and Opening balance difference.

Opening balances for Cost centers

In the Accounts table, the Opening column can also be used to enter the opening balances of Cost centers.

Opening balances for Segments

Opening balances for Segments must instead be entered using opening transactions in the Transactions table.

For more information, see the Segments page.

Start using Banana Accounting during the year

If you start using Banana Accounting when the accounting year is already in progress and need to transfer work previously done with another program, you can proceed in two ways.

Resume accounting from the beginning of the year

You can start the accounting from the beginning of the year and also transfer all transactions already recorded with the previous program.

In this case:

1. enter the opening balances at the beginning of the year in the Accounts table
2. enter the transactions already recorded with the previous program in the Transactions table
3. continue with the new transactions in Banana Accounting.

This way, you have all the accounting details for the year in a single file.

For more information, see Retrieving data from other programs.

Start from the date you switch to Banana Accounting

You can also start the accounting directly from the date you switch to Banana Accounting.

In this case, you must enter the accounting situation existing on that date in the Accounts table.

In addition to the opening balances of the Asset and Liability accounts, you must also enter:

• the balances of Expenses, as positive amounts
• the balances of Income, as negative amounts.

The profit or loss accrued up to the date of the switch must be entered in the Retained earnings/losses account:

• in the event of a profit, enter the opening balance as a negative amount
• in the event of a loss, enter the opening balance as a positive amount.

Check that the sum of the opening balances equals zero, so that Banana Accounting does not report any differences.

From that point onward, you can enter new transactions in the Transactions table.

Enter opening balances as opening transactions

Opening balances can also be entered as opening transactions in the Transactions table, either for all balance sheet accounts or for specific account categories, such as Segments, whose opening balances must be entered manually.

For each opening transaction:

1. enter the accounting start date as the date
2. in the DocType column, enter the code 01
3. enter the account in Debit or Credit
4. enter the amount.

The total opening balances entered in Debit must balance with the total opening balances entered in Credit.

Opening balances entered through transactions are used when preparing reports.

If the same file contains opening balances in the Opening column of the Accounts table and opening balances are also entered manually in the Transactions table, these values are automatically added together.

This is the case, for example, with opening balances for Segments entered through opening transactions, which are added to the opening values already present in the Accounts table.

Use different opening exchange rates

Entering opening balances through transactions can also be useful when you need to use opening exchange rates that differ from those in the Exchange rates table.

This procedure may have accounting and legal implications. Before using it, you must therefore understand its effects correctly.

Previous year balances

Previous year balances are different from opening balances.

If you start new accounting by transferring existing accounting and want to display the previous year's values in the printouts as well, you must enter the previous year's closing balances in the Accounts table, Previous view, Previous year column.

Enter:

• the closing balances of Asset accounts
• the closing balances of Liability accounts, with a minus sign (-) before the amount
• the closing balances of Expenses
• the closing balances of Income, with a minus sign (-) before the amount.

These values allow you to display the previous year's data in the printouts as well.